Al-Sisi, Electricity Ministry to finalise contract with Shanghai Electric for coal-fired power plant in September

Mohamed Farag
3 Min Read
In November, Orascom Construction, part of OCI NV, announced that it will construct a coal-fired power plant in Egypt, which will run at a capacity of between 2,000MW-3,000MW (AFP Photo)

The Ministry of Electricity and Renewable Energy will sign the final contract to establish a coal-fired power plant with Chinese company Shanghai Electric when President Abdel Fattah Al-Sisi visits China in September.

Director of Shanghai Electric in Egypt Chein Chen said that both sides have agreed on all technical, financial, and legal aspects of the contract to build a power plant fuelled by coal in Hamrawein with a capacity of 2,640 MW and investments of $3bn.

The company plans to sign the final contract for the project during Al-Sisi’s visit to Beijing in September in the presence of the Chinese president.

Chen said that Shanghai Electric will establish the project through the EPC+ Finance system, by which the Chinese company will manage engineering, procurement, and construction work and secure the necessary funding.

Chen said that three Chinese banks will finance the project, including the Industrial and Commercial Bank of China (ICBC), the Export and Import Bank of China (EXIM), and Chinese Development Bank (CDB).

The Egyptian Electricity Holding Company (EEHC) will repay the Chinese loans over 15 years with an allowance for facilitated payment.

The Ministry of Electricity has received 13 offers from Arab and international companies in a bid to manage consultancy of the project. The wining company will sign a contract with the ministry to conduct studies and assessments of the project.

Chen pointed out that his company has a key strategy for the energy sector in the Middle East and Africa to meet the growing demand for energy. The company aims to use varied energy resources such as thermal, nuclear, wind, solar, and others.

The Ministry of Electricity has signed nine agreements with China with investments of up to $30bn to build nine power plants fuelled by coal with a capacity of 22,000 MW. They also signed agreements to develop the national electricity grid and to establish a factory of smart meters in Egypt, as well as a pumped-storage hydroelectricity (PSH) project and a laboratory to assess renewable energy equipment.

The Ministry of Electricity has formed a new strategy in the fields of electricity generation, transmission, and distribution. This strategy will ensure an optimal technical and economic mix to produce energy until 2035. It is primarily based on the diversification of energy resources and increased use of clean coal technology, new and renewable energy, and nuclear energy.

Chen said his company is preparing to hold talks with the Egyptian government to establish solar energy projects and activate the memoranda of understanding that were signed during the Egypt Economic Development Conference held in Sharm El-Sheikh in March 2014.

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